Backflip Closes First Securitization, Backed By $95m In Rtl Loans

Backflip, a real estate financial technology company, announced on Thursday that it has closed its first securitization, a $95 million transaction backed by residential transition loans (RTLs).

The deal marks a significant step for the company following the launch of its asset management subsidiary, Backflip Asset Management LLC, in mid-November. The firm said the securitization was oversubscribed.

Backflip operates as a direct lender, loan servicer and asset manager.

“Closing our first securitization is a watershed moment for Backflip and a strong endorsement of our strategy,” Richard Porteous, the company’s chief investment officer, said in a statement.

“Institutional investors recognized the value of our vertically integrated approach. By controlling the entire lifecycle of the loan — from origination to our in-house servicing — we provide a level of data integrity and asset management capability that is differentiated in the sector.”

The company said the transaction will lower its cost of capital and diversify its funding sources as it looks to scale lending to residential real estate investors nationwide. The deal was unrated and drew interest from a range of institutional buyers.

The securitization included A1, A2 and M classes of notes, all of which were sold. It also features a two-year revolving period that allows repayments to be reinvested, providing an estimated $300 million in additional capacity.

Performance Trust Capital Partners LLC was the structuring agent, bookrunner and initial purchaser. Mayer Brown LLP represented Backflip, while Morgan, Lewis & Bockius LLP advised Performance Trust. Setpoint conducted third-party due diligence services.